Question

0/0.9 points Previous Answers 1/6 Submissions Used My Notes Sarah secured a bank loan of $160,000 for the purchase of a house. The mortgage is to be amortized through monthly payments for a term of 15 years, with an interest rate of 3%/year compounded monthly on the unpaid balance. She plans to sell her house in 5 years. How much will Sarah still owe on her house at that time? (Round your answer to the nearest cent.) $ 88569 91 x

Answer 1

we need to find monthly payment first

1-(1+5)*** L = PMT

L=160000

t=15 years

r=3% = 0.03

n=12 for monthly payment

1-(1 + 0.03 ) -12-15 160000 = PMT 0.03 12

160000 = PMT 1-(1 + 0.0025) -180 0.0025

160000 = PMT 1-(1.0025)-180 0.0025

160000 = PMT 1-0.6379 0.0025

160000 = PMT 0.36201 0.0025

160000 = PMT 144.80547

PMT = 160000 144.80547

PMT = 1104.93062

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now we want to find the unpaid balance after 5 years

so the remaining year is t=10 years

1-(1+5)*** L = PMT

PMT=1104.93062

t=10 years

r=3% = 0.03

n=12 for a monthly payment

.

L = 1104.93062 1- (1 + 0,03) 0.03 12

L= 1104.93062 1- (1 +0.0025)-120 0.0025

L= 1104.93062 1- (1.0025)-120 0.0025

L = 1104.93062 1 – 0.74109 0.0025

L= 1104.93062 0.25890 0.0025

L= 1104.93062 (103.5617

L = 114428.552

L 114428.55